Latest News and Opinion

I see intermarket analysis (the idea that other markets can be predictors of the stock market) mostly as a big waste of time. Often, what correlates today won’t correlate a year from now, or the correlation may even reverse. The best way to analyze and forecast stock price trends is to analyze stock prices themselves. That’s the basis of technical analysis (TA). I spend about half my time on TA in my analytical work for The Wall Street Examiner Pro Trader Market Updates (http://wallstreetexaminer.com/category/professional-edition-3/todays-markets-professional-edition/).

But there is an exception to the rule that intermarket analysis is useless….and it’s the U.S. Treasury market.

If you know what to look for, Treasuries-in particular, the 4-week T-Bill-can tell you something very important about liquidity and which direction the money is flowing. That, in turn, will ultimately tell you where the stock market is headed.

The Trump/Republican tax proposal sketch is out. 360061522-Republican-Tax-Plan While the hope is that lowering marginal tax rates will stimulate the economy (creating more jobs and tax revenue for Uncle Sam),

This is the new model of nationalization: central banks control the valuation of private-sector assets without actually having to own them lock, stock and barrel.As you no doubt know, central banks don’t actually print money and toss it out of hel…

Listening to CNBC and Bloomberg TV, you might have gotten the impression that Hurricanes Harvery and Irma created such extensive damage (they did) that there would be labor shortages and a big rise in real wages.

But it’s irresponsible for the nation’s most-trusted investing publication to encourage this idea.

On July 7, WSJ ran a story on its website with the headline, “Forget an IPO, Coin Offerings Are New Road to Startup Riches.”

The story notes that ICOs have already raised $1 billion in 2017. The first quote, from a Silicon Valley lawyer who advises startups on how to structure their coin offerings, is “It’s very hot right now.”

Liquidity moves markets!

The label on one of the charts, which shows the amounts raised by the biggest ICOs so far this year, is “Ka-ching.” Another chart showing the increase in ICO amounts raised by year is labeled “Virtual Bonanza.”

Reporter Paul Vigna waits until a third of the way through the story to point out the risks, but only spends just four paragraphs on them before returning to more examples of ICO successes.

Here’s why WSJ‘s rosy portrayal of ICOs is so troubling…

Initial Coin Offerings Have Been Hammered This Year

While Vigna focuses a great deal on the extraordinary amounts of money that ICOs have raised – several recent ones have brought in more than $100 million – he fails to point out that most of the cryptocurrencies launched with ICOs this year have plummeted in value.

Urgent: An incredibly rare gold anomaly is shaping up in the markets as we speak — one that has occurred ONLY twice in the past 20 years. And it’s about to happen again. Details here…

And we’re not talking about 15% to 20% pullbacks. Most of the biggest ICOs from the past few months are down 30% to 60%.

One cryptocurrency, SonM, raised $42 million in its June 16 ICO. The concept behind it is to use cryptocurrency to create a cloud-based computing platform. But since then, its SNM token has cratered 90% in value, from $0.42 per coin to $0.04.

The Status ICO on June 28 raised an impressive $90 million. Status is a messaging platform that aims to link Ethereum‘s decentralized applications (Dapps) to other widely used platforms, such as Android and iOS. A compelling concept, but the SNT token has plunged 59% in less than two weeks.

Another highly anticipated ICO, the Basic Attention Token (BAT), raised $35 million in its June 1 ICO. These tokens are intended to integrate with the Brave web browser – a pretty good idea from an established operation. But the BAT cryptocurrency is down nearly 45%.

And the list goes on. The BNT tokens for Bancor, which raised $153 million on June 22, are down 55%. MobileGo raised $53 million on June 11; its MGO tokens have fallen 68%. TenX raised $64 million just days ago (July 8) and already is down 37%.

While ICOs have great potential as a way to crowdfund startups based on digital currencies and the blockchain, this form of investing is very new territory.

It’s easy for investors to look at the huge increases in the price of Bitcoin and price of Ethereum and think they need only “get in on the ground floor” of any new cryptocurrency to become rich practically overnight.

But the reality is a lot more complicated…

Why ICOs Aren’t Like Bitcoin and Ethereum

While ICOs have some features in common with Bitcoin – they’re both digital tokens based on blockchain technology – there are key differences.

The main difference is that ICOs are typically controlled by a startup company. The purpose of the ICO is to help raise capital for the startup while simultaneously distributing its digital tokens to potential customers. Ideally, the digital tokens sold are an integral part of the startup’s business.

For instance, the Basic Attention Token is a tool to help online publishers monetize content. The tokens are to be exchanged in an ecosystem that includes advertisers, publishers, and users.

Bitcoin, on the other hand, is a decentralized digital currency. No entity controls it – no government, no central bank, and no company. It was developed in the wake of the 2008 financial crisis as an alternative to fiat currencies and a rigged financial system.

So Bitcoin’s value derives from how well it ultimately fulfills that role.

About Money Morning: Money Morning gives you access to a team of ten market experts with more than 250 years of combined investing experience – for free. Our experts – who have appeared on FOXBusiness, CNBC, NPR, and BloombergTV – deliver daily investing tips and stock picks, provide analysis with actions to take, and answer your biggest market questions. Our goal is to help our millions of e-newsletter subscribers and Moneymorning.com visitors become smarter, more confident investors.

Wall Street Examiner Disclosure:Lee Adler, The Wall Street Examiner reposts third party content with the permission of the publisher. I am a contractor for Money Map Press, publisher of Money Morning, Sure Money, and other information products. I curate posts here on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. Some of the content includes the original publisher's promotional messages. In some cases I receive promotional consideration on a contingent basis, when paid subscriptions result. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler, unless authored by me, under my byline. No endorsement of third party content is either expressed or implied by posting the content. Do your own due diligence when considering the offerings of information providers.

Cut through the Wall Street spin to get a clear view of the markets and the economy."Get the facts" delivered every day.

Check your inbox for the confirmation email which is sent instantly. If not there, check your SPAM folder and be sure to whitelist the "From: Lee Adler" email address. Your information will *never* be shared or sold to a 3rd party.

Cut through the Wall Street spin to get a clear view of the markets and the economy. "Get the facts," delivered by email.
- Lee Adler

(Optional)

Check your inbox for the confirmation email which is sent instantly. If not there, check your SPAM folder and be sure to whitelist the "From: Lee Adler" email address. Your information will *never* be shared or sold to a 3rd party.